Article: The Switch in Radio from Diary Metering to Personal People Meters… Who Wins, and Who Loses?

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Below is an article that I originally wrote for BNET about a switch in the way that radio audiences are measured. It’s a huge change in the industry, and I discuss what it means for stations and advertisers:

The way that radio ratings are determined — and therefore the way that advertisers buy radio — has been changing. Arbitron, the company that calculates ratings for radio stations in different markets, is gradually shifting from a diary based system — where people are expected to remember and record their radio listening habits — to a system based on a device that they call the Personal People Meter (PPM).

The Personal People Meter is a beeper-sized device that picks up any audible radio-encoded transmission, stores that information, and sends it to Arbitron. People enlisted by Arbitron carry these around with them at all times, so their radio listening habits can be recorded and observed.

Arbitron already has PPM set up in 20 of the nations largest radio markets [warning: PDF link]. This summer, PPM will launch in five more markets — Baltimore, Denver-Boulder, Pittsburgh, St. Louis, and Tampa-St. Petersburg — and eight will be added in the fall.

PPM metering has a big advantage over the diary method because it’s a passive system rather than an active one. This means that it doesn’t rely on people actively remembering and recording their listening habits, and isn’t dependent on them being truthful. While there still are errors, at least they’re not human errors.

The problem with passive devices like the PPM is that they’re going to pick up radio that the wearer isn’t even listening to. Imagine shopping at a mall where they are playing radio background music — the device will pick it up as radio listening, even if the wearer hasn’t paid the music any attention.

Passive devices can sometimes lead to a situation where the listening picked up might not actually represent the listeners’ true preferences. This is especially true with listeners under the age of 16, since they are often in the car but do not have control of the radio dial.

One other concern is that the PPM only measures the listening habits of those individuals who are actually willing to carry around a black beeper-sized device with them around all day. PPM has shown that more males listen to the radio than females. Arbitron has said that this is likely because men spend more time commuting and in their cars — but critics say that women just don’t want to be seen carrying the PPM device.

Despite these shortcomings, PPM is becoming the new standard, and it is upon PPM numbers that new ad buys will be based. It has caused major shakeups in a lot of the markets into which it has been introduced.

Many predicted that certain types of radio — for instance rock stations — would benefit while other genres suffered. The reality is that each market is different and that no one type of station has necessarily benefited or suffered across the board. The stations that have really been hurt by the new system are those that have a cult following. Stations with a broader appeal but less vocal listeners have benefited.

PPM has shown that compared to diaries people listen for shorter periods of time than they say they do, and to more stations. People would record large blocks of time spent listening to their favorite stations in their diaries, but the PPM device revealed that people don’t listen for as long as they say and they flip around a lot more than they claim to.

The genre of these stations was different in each market — in some places it’s a talk radio station, in others an urban or R&B station, and in others Spanish language radio. But, a lot of stations suddenly found their place in the rankings drop precipitously overnight.

It’s worth noting that radio audiences for these stations haven’t changed — just the way that they are measured has. An advertiser who is advertising on one of these stations should be getting about the same number of listeners, and therefore the same results as before. Still, the drop in the rankings is a huge blow for these stations going forward.


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